HARP (Home Affordable Refinance Program) is a well know program which utilizes funds provided by the government. The HARP program has gone through a few iterations, the original HARP and HARP 2.0. There is no official designation of HARP 2.0 on the Making Home Affordable website, but the biggest change was eliminating the cap of 125% loan to value.
If you were recently rejected for a loan modification under the HARP program or any other type of loan modification, find out exactly where you fell short. You may be able to use bankruptcy to help set yourself up to be approved for a HARP loan modification or standard loan modification. There are many cases where a mortgage bank will reject home owners for loan modification applications because of the borrower’s debt to income ratio. Your debt to income ratio is defined as your monthly debt obligations compared to the monthly income. So, if you need to make payments of $5000 per month to meet your debt obligations and your income is $8000 per month, then your debt to income ration is 5000:8000 or 62.5%, meaning that your debt is taking up 62.5% of your income each month. You have a little under 40% of your income left for expenses, savings, and emergencies.
If your bank or mortgage company considers your debt to income ratio to be too high to qualify for their loan modification program, consider using bankruptcy to eliminate your debt first. If you eliminate all of your debt payments, the you can lower your debt to income ratio in order to qualify for the loan modification program.
Each mortgage company may have varying standards for what they consider to be acceptable for a loan modification. The HARP program has no debt to income ratio qualifications on its own, but the official HARP website explains that any bank can “over-lay” their own requirements on top of the HARP program requirements. The requirements found on the HARP page do need to be met, but mortgage companies can add more requirements that they need their customers to meet for a loan modification approval.
In Riverside, our law office and Riverside bankruptcy attorneys are available to talk to you about your experience with a loan modification and help you find a resolution to your debt issues to help you qualify for a loan mod. We also have Orange County bankruptcy attorneys to help you qualify for your loan mod in Orange County. To set an appointment, Bankruptcy Law Professionals can be reached at (855) 257-7671.
